Back when I was a young tech reporter in the 1980s, I would head to Las Vegas each year to watch Intel Corporation (NASDAQ:INTC) headline the annual Comdex trade show, along with its original equipment manufacturers (OEMs). I think of it almost every time I write about Intel stock.
Comdex disappeared decades ago, but its spirit lives on in Taiwan, at the annual Computex trade show, where Taiwanese OEMs show off their latest wares and where, once again, Intel gave the keynote.
This has brought the market cap to $263 billion, passing that of Walmart Inc (NYSE:WMT), and growth has returned thanks to the cloud. But devices remain a market, too, and that’s where Computex comes in.
The Big Reveal and Intel Stock
At its Computex keynote, headlined by senior vice president Gregory Bryant, Intel announced an 8086-based processor with a 5 GHz clock speed, displays that can let laptops run over 24 hours on a charge. It also promised 5G support on laptop products that will ship this coming Christmas.
The keynote was filled with references to partners like Sprint Corp. (NYSE:S), which is supporting the 5G rollout, and Taiwan-based PC companies ASUSTek Computer Inc. (OTCMKTS:ASUUY), Acer Inc. (TPE:2353) and Micro-Star International Co Ltd (TPE:2377).
Star power at the event was provided by Chinese-American NBA guard (and Harvard graduate) Jeremy Lin, who described Intel’s pitch for gaming systems.
The result will be things like twin-screen artificial intelligence laptops, laptops with only digital (rather than physical) keyboards, mouse trackpads that double as displays, and gaming systems that are faster out of the box.
The main purpose of Computex is to get people excited about the coming Christmas season, which is key to the PC industry’s profits. If the trade show hype is translated to the sales floor it is going to make stocks like BestBuy Co Inc (NYSE:BBY), up less than 4% so far in 2018, look cheap by the end of the year.
The Bigger Story
Despite its rise over the last two years Intel stock still trades well below its year 2000 high of almost $74 per share due to its continuing failures in the mobile market. Apple has been throwing Intel some iPhone modem business but also appears to be moving away from Intel as a Macintosh chip supplier.
Apple’s size now gives it the scale to produce its own chip designs, an enormous comedown from the days in 2008 when Intel contemptuously turned down the chance to make chips for the then-new iPhone.
To this day Intel remains primarily a PC and cloud chip company. The continuing growth in cloud has brought growth back to Intel, but if cloud slows down the company’s growth cycle may stop with it.
The Bottom Line on Intel Stock
Back in my youth clients meant computers you put on a desk or carried under your arm. Today a client means a phone, and while fixed workspaces often require PCs, or something like them, less-and-less work is being done in a fixed location.
Intel’s heralding of next-generation PCs could give the industry a boost later this year, but won’t provide the kind of sustainable growth it could have gotten by getting into mobile sooner.
Computex is a great, nerdy time, but the good old days aren’t coming back for Intel unless it finds its way in mobility.
Dana Blankenhorn is a financial and technology journalist. He is the author of the historical mystery romance The Reluctant Detective Travels in Time, available now at the Amazon Kindle store. Write him at email@example.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article.